Optimal maintenance policy for equipment leased with base and extended warranty

ABSTRACT

In this paper, we consider an equipment leased with a warranty contract with the possibility to extend the warranty at a given price that depends on its duration. During the warranty period, the lessor (who possesses the equipment) performs and pays for repairs at failure and for preventive maintenance (PM) actions whenever the equipment reliability reaches a specific limit. After the warranty ends, repairs and PM actions are still performed by the lessor, but they are billed to the lessee (who rents the equipment). Furthermore, in case the total average equipment downtime due to repair and PM actions during the lease period surpasses a certain pre-specified limit agreed on in the lease contract, a penalty is supported by the lessor. A mathematical model and numerical procedure are proposed to determine the PM intervals durations that maximise the lessor’s expected total profit during the lease period. The optimal solution is obtained by determining the combination between the optimal equipment reliability threshold that triggers a PM action and the optimal extended warranty period. A numerical example is given to illustrate the use of the proposed model and a sensitivity analysis is performed.

KEYWORDS:

• Leasing
• reliability
• base warranty
• extended warranty
• imperfect preventive maintenance

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The authors confirm that the data supporting the findings of this study are available within the article.

Additional information

Notes on contributors

Amel Ben Mabrouk

Amel Ben Mabrouk is currently working as an assistant professor at South Mediterranean University, Tunisia. She obtained her PhD from the National Engineering School of Tunis (ENIT), University of Tunis El Manar. Her research interests include Supply Chain Management, Operations Management, Reliability and Maintenance Management.

Anis Chelbi

Professor Anis Chelbi is full professor. His main expertise and research interests include operations and supply chain management. Dr. Chelbi heads a research laboratory on Reliability and Robotics and is also an associate member of the Interuniversity Research Center on Enterprise Networks, Logistics and Transportation (CIRRELT) in Canada. In addition to his numerous scientific publications mainly related to maintenance, production, and reliability, he has more than 25 years of experience as a consultant and trainer for national and international companies in various fields such as Aeronautics, the Chemical industry, and other industries such as ceramics, packaging, and agri-food. Professor Chelbi serves on various scientific committees of renowned international conferences related to industrial engineering and operations management. He was chairman of the scientific committee of the international conference MOSIM'20 (Modeling and Simulation). He is also Associate Editor of the scientific journal Heliyon Engineering and member of the Editorial Board of the scientific journal "Journal of Quality in Maintenance Engineering". Finally, he is the recipient of the award: ‘Outstanding Paper Award at the Literati Network Awards for Excellence’, 2009.